The Alberta oil sands resource is vast; however, the amount that can be accessed via open-pit mining is limited. The process of extracting oil from bitumen via open-pit mining has now been going on for decades and could be considered a mature industry. Under Alberta law, plans for the suspension, abandonment, remediation and surface reclamation of each oil sands mine and associated processing plant must be in place before the government allows mining to take place. Each operator must also provide some form of financial security to the Government of Alberta to ensure that funding will be in place to pay for suspension, abandonment, remediation and surface reclamation liabilities, in the event that the Approval Holder is unable or unwilling to do so. As a mine approaches its end-of-life, the Approval Holder must increase the amount of financial security provided to Alberta Environment and Sustainable Resource Development, such that by the time the mine has less than six years of reserves left, the entire amount of the estimated clean-up cost is covered by financial security. One of the forms of financial security made available to oil sands operators, effective 2011, is a qualifying environmental trust (QET). The royalty regime in Alberta for operators of mature oil sands mines (known as the post-payout phase) is such that royalties paid by oil sands operators to the government are calculated based on revenue less ‘allowed’ costs. Abandonment, remediation and surface reclamation costs are considered allowed costs. However, an Approval Holder cannot deduct allowed costs from royalties after bitumen production is complete; thus any suspension, abandonment, remediation and surface reclamation costs incurred after production are not deductible. On the other hand, the funding of a QET to provide financial security for future suspension, abandonment, remediation and surface reclamation costs is immediately deductible for royalty and income tax purposes. For reasons detailed herein, we expect that as oil sands mines approach their end-of-life, the operators will establish QETs to avoid forfeiting the deduction of their suspension, abandonment, remediation and surface reclamation costs. The suspension, abandonment, remediation and surface reclamation liabilities that have accrued to the oil sands operators are now in the billions of dollars. If even a portion of these are funded by QETs, the effect on the amount of royalties and taxes flowing to the Government of Alberta will be in the hundreds of millions of dollars. Thus, understanding if and when oil sands operators will choose to use QETs is important for the forecasting of government revenues, particularly as oil sands royalties are now the single biggest contributor to Alberta’s total royalty revenue. It should be noted that a QET provides a very strong form of financial security. Various versions of environmental trusts are available to mining companies in jurisdictions throughout the world. They are generally deductible for tax purposes; however, we find almost no use of them anywhere, including other jurisdictions within Canada. In this report we discuss why we believe that oil sands firms will use QETs as the reserves in their mines run down. This is done in the context of Alberta Environment and Sustainable Resource Development’s Mine Financial Security Program, introduced in 2011, and the fact that the end-of-life of a number of oil sands mines are in the not too distant future.